Let's Fight for a Progressive Agenda

By Bernie Sanders, Reader Supported News

30 September 12

here are two major economic and budgetary issues which Congress must address in the lame-duck session or soon afterward. First, how do we reverse the decline of the middle class and create the jobs that unemployed and underemployed workers desperately need? Second, how do we address the $1 trillion deficit and $16 trillion national debt in a way that is fair and not on the backs of the elderly, the children, the sick or the poor?

Both of these issues must be addressed in the context of understanding that in America today we have the most unequal distribution of income and wealth of any major country on earth and that the gap between the very rich and everyone else is growing wider. Today, the top 1 percent earns more income than the bottom 50 percent of Americans. In 2010, 93 percent of all new income went to just the top 1 percent. In terms of wealth, the top 1 percent owns 42 percent of the wealth in America while the bottom 60 percent owns just 2.3 percent.

In my view, we will not make progress in addressing either the jobs or deficit crisis unless we are prepared to take on the greed of Wall Street and big-money interests who want more and more for themselves at the expense of all Americans. Let's be clear. Class warfare is being waged in this country. It is being waged by the Koch brothers, Sheldon Adeslon, Mitt Romney, Paul Ryan and all the others who want to decimate working families in order to make the wealthiest people even wealthier. In this class war that we didn't start, let's make sure it is the middle class and working families who win, not the millionaires and billionaires.

In terms of deficit reduction, let us remember that when Bill Clinton left office in January of 2001, this country enjoyed a healthy $236 billion SURPLUS and we were on track to eliminate the entire national debt by the year 2010.

What happened? How did we go from significant federal budget surpluses to massive deficits? Frankly, it is not that complicated.

President George W. Bush and the so-called "deficit hawks" chose to go to war in Afghanistan and Iraq, but "forgot" to pay for those wars -- which will add more than $3 trillion to our national debt.

President Bush and the "deficit hawks" provided huge tax breaks to the wealthiest 2 percent of Americans -- which will increase our national debt by about $1 trillion over a 10-year period.

President Bush and the "deficit hawks" established a Medicare prescription drug program written by the pharmaceutical and insurance industries, but they "forgot" to pay for it -- which will add about $400 billion to our national debt over a 10-year period.

Further, as a result of the greed, recklessness, and illegal behavior on Wall Street, this country was driven into the worst recession since the Great Depression which resulted in a massive reduction in federal revenue.

And now, as we approach the election and a lame-duck session of Congress, these very same Republican "deficit hawks" want to fix the mess they created by cutting Social Security, Medicare, Medicaid and education, while lowering income tax rates for the wealthy and large corporations. Sadly, they have been joined by some Democrats.

The fiscal crisis is a serious problem, but it must be addressed in a way that will not further punish people who are already suffering economically. In addition, it is absolutely imperative that we address the needs of 23 million Americans who are unemployed or underemployed.

What should working families of this country demand of Congress in response to these crises? Let me be specific:

First, at a time when the effective tax rate for the rich is the lowest in decades, we must repeal the Bush tax breaks for the top 2 percent which will reduce the deficit by $1 trillion over the next 10 years.

Second, we must recognize that Wall Street caused the economic crisis, and that it has a responsibility to reduce the deficit. Establishing a 0.03 percent Wall Street speculation fee, similar to what we had from 1914-1966, would dampen the dangerous level of speculation and gambling on Wall Street, encourage the financial sector to invest in the productive economy and reduce the deficit by $350 billion over 10 years. Importantly, this fee, like similar levies in many other countries, would not apply to ordinary investors, retirees or parents saving to send their kids to college. Rather, it would apply to Wall Street investment houses, hedge funds and speculators who sell credit default swaps, derivatives and operate other risky financial schemes that nearly brought down the entire economy.

Third, we have got to prohibit offshore tax shelters. Each and every year, the United States loses an estimated $100 billion in tax revenues due to offshore tax abuses by the wealthy and large corporations. The situation has become so absurd that one five-story office building in the Cayman Islands is now the "home" to more than 18,000 corporations. According to a recent report by James Henry, a former chief economist at McKinsey, the wealthiest people in the world are hiding between $21 trillion to $32 trillion in offshore tax havens to avoid paying taxes. About a third of this amount, according to one estimate, is from wealthy Americans. The wealthy and large corporations should not be allowed to avoid paying taxes by setting up tax shelters in Panama, the Cayman Islands, Bermuda, the Bahamas or other tax haven countries. Cracking down on these tax evaders could reduce the deficit by about $1 trillion over the next decade.

Fourth, at a time when we have almost tripled military spending since 1997 and spend nearly as much on the military as the rest of the world combined, we must reduce unnecessary and wasteful spending at the Pentagon. According to a number of experts, the Pentagon today cannot account for hundreds of billions of dollars in its budget. Even Sen. Tom Coburn (R-Okla.), perhaps the most conservative senator in this country, believes that we could reduce defense spending by $1 trillion over a 10-year period while ensuring that the United States continues to have the strongest and most powerful military in the world.

Fifth, we have got to eliminate tax breaks for companies shipping American jobs overseas. Today, the United State government, despite our losing over 55,000 factories in the last 10 years, continues to reward companies that move U.S. manufacturing jobs overseas through loopholes in the tax code. Eliminating these loopholes would raise more than $582 billion in revenue over the next ten years and bring jobs back home to America.

What else? Ending corporate welfare for big oil, gas and coal companies; requiring Medicare to negotiate with the pharmaceutical companies for lower drug prices; taxing capital gains and dividends the same as work; establishing a progressive estate tax; and eliminating waste, fraud and abuse at every agency in the federal government would reduce spending by more than $350 billion and raise a significant amount of revenue without harming the middle class.

Taking these steps would reduce the deficit by more than $5 trillion.

Finally, and importantly, with these kinds of savings we could invest aggressively in rebuilding our crumbling infrastructure, transforming our energy system away from fossil fuels and restoring our manufacturing base. That investment could create millions of decent paying jobs, make our country more productive and help us lead the world in addressing the crisis of global warming.

Despite what virtually all Republicans and some Democrats want, we must not balance the budget on the backs of a collapsing middle class or the poorest people in our society.

Despite what virtually all Republicans and some Democrats want us to ignore, we must create the millions of jobs working families still desperately need.

The American people have been very clear, in poll after poll, that they do not want to cut Social Security, Medicare, Medicaid, veterans' needs, education and other vitally important programs. They also have been clear that they do want the wealthy and large corporations to start paying their fair share of taxes. This agenda, the agenda of the American people, is what I will be taking into the lame-duck session. I ask for your support.

Reader Supported News is the Publication of Origin for this work. Permission to republish is freely granted with credit and a link back to Reader Supported News.

Romney's Curious View of Freedom

By Robert Parry, Consortium News

30 September 12

itt Romney is famous for answers so disconnected from what normal people say that some observers joke that he must be from another planet. He lands in Michigan and declares "the trees are the right height." He goes on a TV show and says he "wears as little as possible" to bed, which would suggest nudity or some moral clash with his Mormon faith.

And when the Republican presidential nominee is asked on CBS' "60 Minutes" about the specifics of his tax plan, he demurs with the response: "The devil's in the details. The angel is in the policy, which is creating more jobs." A reasonable reaction to such an answer might be, "What the hell is that supposed to mean?"

Yet, the Romney campaign has bristled when analysts and critics have stepped in to fill the void on Romney's vacuous tax strategy by making their own assumptions about what it would take to enact his 20 percent cut in income tax rates while not raising the deficit, as Romney has claimed he would do. Romney's fuzziness has left little choice but to speculate how he might handle the math.

One of those logical assumptions is that Romney would have to eliminate or sharply curtail the mortgage-interest deduction which amounts to a tax break for homeownership. If the deduction were removed or phased out, the immediate impact would be a decline in home prices, which would push even more Americans underwater on their home equity. That would deliver another body blow to the U.S. economy.

So, rather than an "angel" of a policy "creating more jobs," the reality is that slashing the mortgage-interest deduction would further reduce the spendable income of many middle-class American homeowners, which would mean they could buy fewer goods and services, which, in turn, would mean more layoffs and fewer jobs.

Plus, more foreclosures and short sales would discourage new homebuilding and threaten millions of jobs associated with that industry. Not to mention that there are independent studies that conclude that Romney's 20 percent tax cut would so reduce tax payments from the rich that his only alternative would be raise taxes on the middle class through elimination of more tax deductions.

However, on "60 Minutes," rather than pursue Romney with aggressive follow-ups on his tax plan, CBS correspondent Scott Pelley teed up a softball for the Republican presidential nominee, noting, "Presidencies are remembered for big ideas, emancipation, Social Security, man on the moon. What's your big idea?"

Romney's response was just as vague as his angelic tax plan: "Freedom. I want to restore the kind of freedom that has always driven America's economy. And that's allowed us to be the shining city on the hill."

Defining Issue

Again, Romney offered no details, but he did touch on what may be the defining issue not only for this campaign but for America's future. How do you define "freedom"?

For Romney, freedom appears to be freeing up corporations - which (or who) "are people, my friend," according to another Romneyism - and letting them to do pretty much whatever they want to those flesh-and-blood people.

Romney seems to think that "freedom" means freeing Wall Street from government regulation, letting health insurance companies shed sick people from coverage, liberating "job-creators" from pesky labor unions, unleashing oil companies from environmental rules, and letting wealthy investors pay lower tax rates than middle-class Americans who actually work for a living.

In other words, despite Romney's stylistic differences from the Tea Partiers, he - the uptight princeling from Mormon royalty - and they - the followers of Sarah Palin and Rush Limbaugh - are more in agreement than many pundits might think. They both equate "freedom" as freedom from the federal government, although they come at the issue from different directions.

Romney's grievances against federal authority may reflect his Mormon heritage, including his grandfather's flight to Mexico in the 1800s amid a federal crackdown on Mormon polygamy and against the church's theocratic rule in the Utah territory. Romney also absorbed the cultural resentment that freewheeling "venture capitalists" typically feel toward securities regulators and other obstacles to extracting big profits.

For the Right's Tea Party base, however, the anger toward the "tyrannical" federal government derives, in part, from a different source, their false narrative describing the nation's founding. Tea Partiers put on tri-corner hats, dress up in Revolutionary War costumes and wave "Don't Tread on Me" flags because they have been sold a bogus storyline about how and why the Framers wrote the Constitution.

Over the past several decades, one front in the Right's "war of ideas" has been to transform the Framers into anti-government ideologues who saw the Constitution as a device for constraining the authority of the central government, while ceding broad powers to the states and creating a "you're-on-your-own" economy.

In reality, nearly the opposite was true. The Constitution's Framers engineered the most significant transfer of power from the states to the central government in U.S. history. They also wanted the federal government to be an engine for national progress, and they had little regard for states' rights.

On a personal level, key Framers, including James Madison and George Washington, despised the idea of state "sovereignty" and "independence." As commander in chief of the Continental Army, Washington had confronted the national disorganization resulting from 13 squabbling states under the Articles of Confederation. The chaos continued into the post-war era with economic stagnation and commercial challenges from Europe.

So, with Washington's staunch support, Madison plotted the destruction of the states' rights-oriented Articles of Confederation and its replacement by the federal-government-is-supreme Constitution. That was the whole idea of the Constitutional Convention held in secret in Philadelphia in 1787.

Madison's Makeover

However, in recent years, the Right's "scholars" - recognizing the allure of a national mythology whether true or false - have labored to revise the history. Their makeover of Madison has been particularly striking.

By cherry-picking and taking out of context some of his comments in the Federalist Papers and by exaggerating his sop to the Anti-Federalists in the Tenth Amendment, the Right turned Madison into his opposite, a hater of a strong central government and a lover of states' rights. [For details on how this history was distorted, see Consortiumnews.com's "The Right's Inside-Out Constitution."]

Next, the likes of Glenn Beck popularized this false founding narrative, giving important impetus to the Tea Party. Millions of Americans associated themselves with a movement that they thought was defending the Framers' vision of a weak central government, powerful states and little or no federal role outside the maintenance of a huge standing army.

In effect, today's Right merged Ayn Rand theories of unbridled selfishness with the quasi-religion of magical markets and placed it all under the umbrella of a founding national narrative that equates states' rights and the rights of corporations as the essence of American "liberty."

In an imperfect way that is what Election 2012 is about, which narrative will dominate the future. President Barack Obama, who was a constitutional law professor, sees the Constitution in the context of the pragmatism that was at the core of what the Framers were trying to achieve, that is, a governing structure for addressing the needs of a diverse and growing nation.

Those early national leaders applied the constitutional powers creatively and broadly, whether Alexander Hamilton's national bank or Thomas Jefferson's purchase of the Louisiana Territories (negotiated by then-Secretary of State James Madison).

During the last century, the trust-busting policies of Theodore Roosevelt, Franklin Roosevelt's New Deal and later reforms like Medicare and civil rights legislation drew on those traditions by using federal authority to solve problems impinging on the nation's "general welfare."

Obama has tried to follow that path, albeit with a fair share of stumbles, by pushing through the Affordable Care Act, the economic stimulus bill, the auto bailout and new Wall Street regulations. Broadly speaking, Obama favors putting the power of the federal government on the side of average Americans.

He also has done so in the face of stiff resistance, at a time when the Republicans and many media pundits are enthralled by the revisionist narrative, that American "liberty" has always been about letting corporations and the rich do whatever they want - and letting states dominate national governance.

The Romney Example

Romney has come to personify that approach, an extremely wealthy financier who prides himself on paying low taxes and who - in private settings with fellow millionaires - speaks with disdain about the struggling masses and their need for government help. He also wants to defer to the states on major national problems like health care.

Whether on behalf of his Mormon ancestors or his Wall Street chums, Romney may see his quest for the presidency as a decisive moment to enshrine the anti-government narrative - and to defeat the alternative one that says "We the People" in the Constitution's Preamble means putting the power of government to work building a country for all.

Without doubt, the Framers were flawed men. Many were slave-owning aristocrats who feared the dangers of unrestrained democracy in which the downtrodden might demand a reversal of fortune for the rich. Some of Madison's "checks and balances" were designed to avoid extreme swings in popular passions.

There were other obvious tensions within the constitutional structure regarding exactly where the boundaries of authority were. That, too, was part of Madison's structure.

But the Framers clearly saw the Constitution as creating a powerful central government and a dynamic system that had the flexibility to address national problems, then and in the future. For instance, one of Madison's most cherished features was the Commerce Clause, which gave the federal government the power to regulate national commerce.

The whole point of including the Commerce Clause among the enumerated powers of Congress was to put the federal government to work improving the economic conditions of the nation. In their time, the Framers talked about construction of roads and canals, but they also wanted the federal government to protect the competitiveness of U.S. commerce versus the more developed economies of Europe.

But that role - along with that history - is on the line in Election 2012. The American people can side with the actual Framers in treating the Constitution as a tool for addressing national problems or they can join with the Tea Partiers who embrace a false narrative that equates "freedom" with hostility toward the federal government.

If that's the result, it could mean near total "freedom" for our fellow citizens, the corporations.